Yahoo’s Attempt At Moving Away From Ad Dependence Fails With Stalled Deal

Yahoo’s is in a tumultuous stage. Its grand plans at revamping its structure have hit a wall in the form of a stalled deal with its Asian partners.

All the parties in discussion with Yahoo have reached an “impasse” over tense valuation discussions. Furthermore, Yahoo!’s biggest shareholders has disclosed that it plans to hold on to four of the company’s 11 board seats. These counter-developments have put a big question on the performance of the newly appointed CEO Scott Thompson, whose attempt to offer a new vision for Yahoo hasn’t taken off.

Lately Yahoo seemed to be increasingly dependent on Ad-revenues through its various ventures. While Yahoo’s intentions made sense, the strategies adopted did not align well with its Asian partners. Yahoo had recently tried to break ties with India, only to come back later. Yahoo’s stake in Alibaba being disputed at US$ 12 Million against US$ 17 Million, may have been the major causes for breakdown in the communication. Coincidentally, Yahoo wishes to withdraw from China’s Alibaba.com by selling all of its 40% Stake & also Yahoo! Japan (35% Stake).

Interestingly, Yahoo wanted the deal to be tax-free! Alibaba and Softbank plan to appeal to Yahoo! in hopes of inking an alternative deal, including one that maybe taxable. However, presently, the situation looks pretty bleak.

Yahoo’s future, at least in Asia seems uncertain at this point. Let’s see how it tackles this dead-lock.

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